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    ASL Annual Report 2012

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    mirza

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    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 89
    Sissnssiltigls Citteice ot 8 He revealed Iron, wherein Is mighty power and (many) uses for mankind. “Quran 57:25” WHO WE ARE State of the art Cold Rolling Complex based on latest Japanese and Austrian technology, backed by premier Pakistani & Japanese conglomerates. -_™. ead Evaluation of Board's Performance ee) Cad ened Ce Ce Key Financial Highlights SAC tary eco Pee Cee Eg SA 2 53 54 85 56 aa Sees saic! eet eked eee’ er gta’ Dt Cee aed ee ee Koad een Rieti Cd ee ee eras eu ‘Statement of Changes in Equity Ree ra kaka ener ety FormPraxy VISION To be a world class manufacturer of Cold Rolled Steel. To become an efficient producer of Cold Rolled Stee! while serving interests of all stakeholders. “THE FINEST STEEL HAS TO GO THROUGH THE HOTTEST FIRE” -Riehard Nixon 02 sista sre. muis unarreD CORPORATE STRATEGY ‘Our comorate strategy ental producing the highest ualty of products benefiting all stakeholders. The ‘Company emphasizes on transparency, bullding ‘eater standards for ethical values ‘ASML focuses on its team and belleves in regular tralning and development ots human resource ‘ven the technologlcally advanced nature of ASML's plant and machinery There Isa strong commitment for continuous Improvement of each process In order to optimize cffictency. We strongly adhere to the following to be In line with the global best practioes: ‘Value creation for all stakeholders while maintaining a strong competitive position; Keep a strong focus on the long run. sustalnable advantages; Develop and strengthen a transparent and Inverttve cutture while encouraging ethical values; Ensuring that corporate strategy passes ‘throughout the organization and Is Inculcated ‘across the Company; CORE VALUES ‘Our People Integrity We are an equal opportunity employer. | Key suocess for ary business fosters Discrimination on any grounds Is Ina transparent ervironment based ‘fundamentally unacceptable. con ethical values. Rogulatory Compliance & Corporate Our values are based on highest Governance Integrty, which determines the way we work, leading to our well-founded ‘The Company remains committed to | reputation. high standards of corporate ‘governance, while adhering to the Excellence & Efficiency ‘applicable laws and regulations. Effictencles, appropriate rek manage- Health, Safety & Environment ‘ment measures and pricing strategies shoule enable proftabe operations ‘The Company strongly endorses and and good shareholder retums in al ‘emphasizes on managing resources | market soenarics. ‘ersurtng safety wthin and beyond Rs ‘own feces, ‘AGASMIL, our conviction for excellence ‘emerges with a passion to provide our ‘ASML stands committed to carryout | customers with CRC comparable witn hts business In a sustalnable manner | Intemational standards. to promote preservation of the ‘environment. CODE OF CONDUCT Being highly responsible corporate, Aisha Steel Mill Ld. ‘expects its employees to uphold ‘and enhanee the reputation of the Company by: + Mainainingan Unimpeachable standard of integrity in ll their business relationships both inside and ‘outside the Company. + Fostering the highest ‘standard of conduct end ‘competence amongst those for whom they are responsibie, ‘+ Ensuring transparency in business transactions, and. rejecting any business: practice, which might be ‘deemed to be improper. ‘> Promoting fair business practoes and ensuring ‘compliance with legal and regulatory requirements, In applying these rules, employees ‘should use the folowing guidelines: 1 Confilct of Interest ‘+ Any personel interest, which may effect or might reasonably be deemed by ‘others to affect an employee's impartiality, should be ‘Geclared up front in writing, ‘+The Company property must 06 sista stem. mus unre > hot he used for personal work Unless specific permission is ‘obtained. * Each staff member is ‘employed in the Company on ‘fulltime basis and ‘therefore, they should not be Involved, direct or indirectly, In ary vocation, business or ‘commeroial activity. Any ‘departure from this can only be made with the wartten parmission of the Chief Executive Officer, 2. Confidentiallty and Accuracy ‘of Information ‘The confidentiality of information received in the course of business ‘must be respected and never be: used for personal ga Infomation gven in the course of business must be honest and ‘never designed to misiead. Further, all Company affairs are to be treated es confidential and ‘should notbe discussed with third parties not only during service with ‘the Company, but even after departing from service. interaction ‘with competitors beyond the ‘approved level wll be regarded a ‘gress misoonduct. 3. Gifts ‘All members are forbidden to ‘accept gifts or borrow money fom ‘another member of the Company ‘or from Showroom Dealers, ‘Vendors or a customer of ASML. 4, Proper Recording of Funds, ‘Assots, Recelpts and Disbursements L Allfunds, assets, receipts and disbursements should be oper recorded in the ‘books of the Company. In pantcuiar, no funds or ‘accounts should be established or maintained for purposes that are not fully ‘and accurateyy reflected in ‘the books and records of the Company. {i Inprinciple, all resources and ‘supplies: teleohone, printers, intemet, office van, stationery, ther supplies, and most Importantly your office time ete, are for official use. 5 Health & Safety Every staff member should take, reasonable care to ensure the health and safety of himself / hersett and others who may be affected by his / her aots at work, Cy Ae Ey ered Se te eee ee ee end Cas Se to aera DoE nue ‘and protection, SE UU ee Ry ‘The staff will maintain an environment that s free from aut UR ue oy Cy CE a dae Jegal proceedings, whether civil or criminal, should Coe eu eC ORE Rte cet id HARVESTING OUR AGRARIAN BASED ECONOMY i SIMPLIFYING LIFESTYLE f CRC UTILIZATION ~ WHITE PRODUCTS « COMPANY PROFILE oa Fi] Aisha Stee! Mills Limited (ASML) isa state of the art | - Arif Habib Group, one of the largest conglomerates ‘cold rolling complex with a nameplate capacity of In Pakistan; 220,000 metric tons per year. ASML is one of the - Metal One Corporation, majority owned subsidiary largest private sector investments in the value added ‘of Mitsubishi Group, Japan ‘atolled steel industry in Pakistan, ~ Universal Metal Group, Japan Itis the only Cold Rolled Coll (CRC) manufacturer in| ASML. was incorporate in 2005, and is sat to booome the country which is using brand new Japanese and | the largest supper of cold rolled stee! cals in the ‘Austrian machinery for allo ts main processes, country, ASML has also entered into a strategic tie-up ‘ensuring best quality production af GRCin the country. | with Mitsubishi Corporation to assist in and ensure ‘seamless marketing, sales, and distribution of ts ‘ASML is @ business verture between premier products. Pakistan and Japanese businass groups namoly: HISTORY Completion sting Incorporated of Erection ~ February ‘onKSE - August Mey 2008 2012 2012 Commercial Operations Date - ‘Commencement of Commencement Ouicber att Erection of trial run - June 2012 PRODUCT: ‘ASML produces Cold Rolled Cols (CRC} of ASMLis the only CRC plant in Pakistan with an intemational standards from imparted Hot Rolled Electrolytic Cleaning ine ("ECL") which substantially Coils (HRC). ‘improves the product quali, removing al impurities making ASML one ofthe most valuable CRC The CRC products willbe offered tothe industial, producers meeting the highest quality standards, ‘engineering and manufacturing indusiry as 0 premium raw material for transformation into ary umber of value-added products for the domestic and COMPANY INFORMATION Board of Directors Me. Mikio Kinoshita Chairman Mr. Arf Habib (Mr. Hesib Rehman Mr. Yoshileazu Uda Me. Kashi Habib Mr. Muhammad Ejaz ‘Mr. Ali Akhtar Khan Mr. KashifSheh Chief Executive Officer ‘Auiltt Committee Mr Kashif Habits Mr. Mikio Kinoshita Member Mr. Hasib Rehman Member Mr. Muhammad Ejaz Member Chairman Registered Office Address: ‘Acif Habib Centre, 23 -MT Khan Road, Karachi - Pakistan webshe : wwwalshasteel.com Pant Address: DSU-45, Pakistan Stee! Down Stream Industrial Estate Bin Qasim, Karachi, Pakistan Auditors ‘AF. Ferguson & Co,, Chartered Accountants ‘State Life Building No:t-C | Chundrigar Road, Karachi ‘Share Registrar Central Depository Company of Pakistan (CDC House, 99-8, SMCHS Shahrae Faisal, Karachi Phone: 92-21-1141-441-500 Bankers & Financing Institutions Asker Bank Lid Bank Alfalah Ltc Bank Al Habib Lid Faysal Bank Lad Habib Metropoiitan Bank Ltd KASB Bank Ktd MCB Bank Ltd National Bank of Pakistan NIB Bank Ltd Pak China Investment Company Lic ‘Saud! Pak industrial & Agyteuttural Investment Comoany P¥t Ltd. ‘Sik Bank Ltd ‘Sindh Bank Ltt ‘Summit Bank Ltd ‘The Bank of Kryber The Bank of Punjab, COMPANY ORGANOGRAM BOARD OF DIRECTORS ‘The Board of Directors of ASML in their individual capsctty bring with them extensive experience and expertise. The Board comprises of the following individuals MR. MIKIO KINOSHITA ‘Chairman & Non - Bective Director (Me. Kinoshita hs over 38 years of relevant expertence. He has been th Metal One Corporation shoe 2003, and has held various ‘executive postions, Porto joining ‘Meal One, Mr. Kinostita wos ‘sssociied wih Nao vai ‘Corporation, where Hs last ‘signment was 26 Managing, Director. Hos a gacuate fom tho Keio Giyula University, Japan. MR. ARIF HABIE [Non-Executive Diector (Mi Af Habis the Craitman & Chief Exseathe of Af Hebb Comorstion Umtod. Ho also the Charman of Patara’ Foriizors Lmited, Fatma Fertllzer Company Limited, Javedan, (Corporation Linted and Memon Heath ‘and Education Foundation, ‘Mr. Az Hal has remalned the elactad Prosidomt/Chaiman of Karachi Siok Exchange sixties inthe past. He i the Founding Member and Former Crairman ‘ofthe Central Depository Company of Pakistan Limited. He has served 2s 2 ‘Member ofthe Privatizton Commission, ‘Boetd of invesumert, Tai Reforms (Commission and Socurties & chang COrinance Review Commiize. Ove the ‘years he has been nomineted on the Board of Directors of @ number of ‘companies by the Government of Pakestan. Presently noi a rector of Sul "Northem Gas Pipelines Company Limited. tier Comores Ensue ‘ea harrman ‘euros Patan Pace Eculy Wanagorrt tt atPati oe ‘Seti Cones Prt ad ‘ea Ess Modest Management Compary ‘rata Geert Company ‘apie Palin Engrg Company Fastan Gone for Play marta Oarelc "ec is SuNormem ans Pipes ‘A Hooray Tate / Dt auld eunaaten ‘eet Eaton ve ‘Pav Vrach foc ‘Annual Roport.2022 13 MR. HASIB REHMAN Non Exoovtve Diresior ‘MaHasi Rehman isthe Prestdont / (CED of Universal Metal Corporation Jepen. His experience inthe stee! industry spans @ period over 20 years both inthe lcel as well es the Intemational arena. Mr. Rehman ié & director of Jopan-Pakistan ‘Asoociation and a member ot Jepen-Pakéstan business ‘co-operation, He also a member (of Tokyo Chemnber of Commorsa ‘and Industry. er Carport Ender (Decor Una aia Pt 14 asia sree wis ured Mr. Uda has over 35 years of ‘experionce in stel trading and project ‘management. He holds the position of Executive Direcior at ASML He's also Dartof the Giooal Marketing Department of Metal One Corporation, Japan; and his last assignment ‘outside Japan was as Vice President ‘of Metal One Asia, Singapore. He has also served as Head of Sise! Department of Nishio Wal (Corporation, Pakistan from 2986 1 1990, and is well versed withthe locel ‘erwironment. Mc. Uda graduated from ‘the faculty of Economics of Keio Gijyuks University, Jopan. MR. KASHIF HABIE Non-Executive Director (Me. Keshit Habib le a member of the Incite of Chartered Accountants of Pakistan (}OAP). He has completed bis Articleshio from AF. Ferguson & o.(a member firm af rice \Weterhouse Coopers), where he gained experience of a dverse set of lerts spenning the Financia, ‘Manufacturing and Services soctars. Ha has at his credit experiance of ‘thee years Intemship in Ai Habib (Corporation Limited and three years’ ‘experience of Executive Directo In ‘cement and fetizer companies of ‘the wou. Presently Mr Kashif Habib is ‘Executive Director at Pak Arab Ferdtzers Limited and Chet xeouthe of A-Abbes Cement Industries Limited. te Compomt Engst ‘Dees Fars Ferter Copan i Javea poration Lid ‘ties PET Manager Links ‘eteet Ener Comper Pa) Lad Semon Heath and Eton Fedor ‘ett eaten ests Rl tba Sandon Fe) Uri oa Este Media Management Co, nod MR. MUHAMMAD EJAZ Non - Executive Director Mr Ejaz a certiied Financia Risk Manager and Poids an MBA ‘rom the Institute of Businoss ‘Administration, Karachi. He has ‘ver 15 years af experience inthe ‘elds of Tesury, Corporate Finance end investrrent Banking, Mr Elaz has served n senior positions atleading local and Jnterational banks including Feyeal Bank, Union Bank and Emirates Bank International. His ey accreditation includes 8 ‘umber of suscoestullargotckat ‘syndication transactions. Hes algo a regular visiting faculty ‘momber at BA, Karachi and NIBAF; Islamabad. ‘mt Copernts Engrasmant pact cite ‘eats RET Nenagarert at a Dicr ‘A Crporston Lt ‘a RET Menagarert at ‘Sohal Enea Development Pd Jdwodan Gajeetont ‘econ fal er Sones (x) ‘A iotes Comer aon ‘Annual Roport.2022 15 MR. ALI AKHTAR KHAN Indapendont & Non -Exsoutive Director Mr. ll Akhtar Khen holds over 35 ‘years of experince inthe ron and, ‘Stool Industry, including 26 years at Pakictan Stoo! Mille where his ast ‘ascignment wee as GM Operations, He's curerty associated with “Tuwairg Stoel Mils Limtod os ‘Advisor Business Dayelopment. During his tenure in the steel sector, Mr. Khan has attended workshops in ‘several countries including Austria, ‘Sweden, Russia, Germany andl USA _gyinghim exposure of te global ‘Stoel sector. Mc. Khan is also apart ‘ime professor at Dawood College of Engineering and Technology.e has @ Masters degree In Eoonomies and Finance ftom Univeraty of Karach), ‘slong with Bocheiors In Metallnyy. 16 ssa srez wus ume MR. KASHIF SHAH Chief Execute OMcer Mr. Shah ia a seasoned professionel wth a euocessful “track record of working wlth top ‘Ver Industral end financial Insitutions in Pakistan. He was _appointod Chief Emoutive of ASML in August 2014. Piorio that he ‘Was responsible to protect and ‘further the interests of Byco Group's majorty shareholders In ‘the capacity of Sponsors Advisor. 'Mr-Shah nas been associated with Hablb Bank Limited and United Bank Limited as Head of Investment Banking between 2004. and 2008. Before thet, Mr ‘Shah was associated with JP ‘Morgan based in Hong Kong, looking afer Mengers and ‘Acquisidons fore number of South ‘Aolan courte, Mr. Shan holds en MBA from Lahore Univers of Management Sciences. ‘tre operas Engngsnet se procter 2a bb Cororton Le MIRZA TARIG BEGG ‘Chief Operating Officer MeBlegg has done his Bachelor of Engineering in Metallurgy in 1968 ‘rom Dawood College of Engineering end Technology Karachi, and possesses over 40 oars of experience in tho Iron and ‘Steel Sector with Pakistan Stee. ‘Asa steel technologist, MrBegs has acquired extensive experience Invarlous aspects of steel making, ‘and maintenance in plant and machinery. ‘TAHIR IQBAL ‘Chie! Financial OMicor & ‘Company Secretary Mc abal isan Associate Member ‘of OMAP, having nine years of ‘experience In finance, eocounting, taxation, corporete afi, isk ‘management, auc'/assuranco ‘coupled with general ‘management experience. Prior‘ Jolning ASML, he was wortdng 6s the GFO & Comper Secretary of ‘aif Habib Corporation Ltd for sic ‘years. He also serves on the boards of RealEstate Modaraba Management Company Lic and ‘S44M Lani Holdings (Pvt) Lid (Aaif Habib Group Company Incorporated in Sr Lanka). BOARD AND MANAGEMENT COMMITTEES Based on the listing requirements and to ensure good corporate governance for our stakeholders, various committees have been formed at both the Board and Management level. Mejority members of the Board are non-executive directors. Board Committees: Board Audit Committee ‘The audit committee remains responsible for recommending, to the Board of Directors the appointment of extemal auditors by the Company's shareholders and considers any questions of resignation or removal of external auditors, ‘audit fees and prevision by extemel auditors of any service to ‘the Company in addition to aucit is financial statements. In the absence of strong grounds to proceed otherwise, the Board of Directors acts in accordance with the recommendations of the Audit Commitiee in the following, matters: 1. To determine appropriate measures to safeguard ‘Company assets; iL Review of preliminary announcements of results prior ‘to publication; fi, Review of financial statements ( quarterly, helf yearly ‘end yearly ) prior to the epprovel by the Board of Directors. with major emphasis on : 8. Sighificant adjustments resulting from the aucit b. Major judgment areas; ©. Going concem assumption; d. Any change in accounting policies and practices; fe. Compliance with applicable accounting standards, and. f. Compliance with isting regulations and other statutory ‘end regulatory requirements; 18 rusia srez wus ummreD ¥. Faxiltating the extemal audit and discussion with ‘external auditors af mejor observations arising ram the interim and final audits and any matier that the auditors may wish to highlight ( In the absence of Management , where necessary); \. Review of Management Letier issued by extemal ‘auditors letter and management's response thereto; vi. Ensuring coordination between the intemal and ‘external auditors of the Company, vil. Review of the scope and extentof the intemal audit and ‘ensuring that the internal audit function hes adequate resources and is appropriately pieced within the Company; vii. Consideration of major findings of intemal investigations and Management's response thereto, i Ascertaining that the intemal control system including financial and operational contvols, accounting system and reporting structure are adequate and effective; x _Instituting special projects value for money studies or other investigations or any meter specified by the Board of Directors in consultation with the CEO and to consider remittance of any matter to the extemal ‘ausitors or to any external body; xi Determination of compliance with the relevent statutory requirements; xi. Monitoring compliance with the best practice of corporate govemance and identfication of significant violations thereof; xii. Consideration of any other issue of matter as may be ‘assigned by the Board of Directors; Board Human Resource & Rermuneration(HRSR) Commitee ‘The role of the HR&R committee is to assist the directors in its oversight of the evaluation and approval of the employee benefit plans, welfare projects and retirement involvement. ‘The committee will recommend any adjustments which are fair and required to attracl/retain high caliber staff for ‘consideration and approvel. The committee hes the following, responsibilities, powers, authorities and discretion: 1 Conduct periodic reviews of the good performance ‘awards, bonuses, long term service award policy and safely awards for sate plant operations. li. Conduct periodic reviews of amount and forms of reimbursement for terminal benefits in case of retirement and death of any employee in relation to current norms. ‘Atta Chan Me Yi id-Marber - MiKo Reteran-Mamber 1 Me Muhammad Bar Member. 1 Consider any changes to the company's retirement. benefit plans including gratuity, pension, ‘post-retirement medical teaiment, based on actuarial report, assumptions end funding recommendations. Review organizational policies __conceming, hhousing/wetfare schemes, scholarships and incentives for outstanding performance. ¥. _ Engure in consultation with the CEO that suocession pans are in place and review such plans at reguiar Intervals for those executives whose appointment, requires board approval (under code of corporate {governance}, namely the CFO, the Company Secretary ‘and the Head of Internal Audit including the terms of appointment and remuneration peckage in ‘accordance with the market positioning, Vi. Review and recommend compensation/benefts for the Chief Executive Officer. ‘The committee meets on as required basis or when directed by the board of directors. The secretary sets the agenda, time, date and venue of the meeting in consultation with the chairman of the committee, The Head HR acts as secretary cof the committee and submit its minutes of the meeting duly ‘signed by the cheirman.These minutes are then circulated ‘to the Board of Directors. ‘Board Executive Committee ‘This Committee consists of four members of the Board and ‘meets at the start of every financial year to formulate and ‘approve the yearly budget and envisaged yearly plans for the ‘The Commmitiee also evaluates and discusses feasibiities for project diversificetions and ary expansion plans to be ‘onducted. The Committee is also responsible for developing ary strategic goals to be implemented. Annual Report 19 MANAGEMENT COMMITTEES ‘Managomont Executive Committos (MANCOM) Me Kashif Shah - Chairman ‘Mancom conducts its business under the guidance of the CEO. The Committes is represented by the heads of all the department of the Company. MANCOM meetings hheld bLmonthly to discuss and review the ongoing business operations. ‘Commitige formed: December 2011, No of meetings held tll Year end 14: ‘The Committee is responsible for the formulation of the business strategy besed on the corporate objectives of ‘the Company as set by the Board of Directors. The terms of reference of the committee are as follows * To develop and approve medium term plan (s) to meet the interim objectives and milestones in ‘accordance with the long: term plan as epproved by the Board; * Update regarding the progress of the various ‘segments of the Company, + Discuss new ideas regarding business/ product lines , new markets / refer opportunities and ‘eesibilty for onward submission to the Board; * Identify any potential risk factors and manage 20 sia sven. mus umireD them accordingly; + Timely decision making with regard to business ‘and employee related issues; * Review the adequacy of operational, administration and financial como}; * To improve performance and efficiency of the Company; Management HR Committoa Mr. Kashif Shah - Chairman Mr. Tariq Begg.- Member Mr. Tahir Iqbal - Member Ms. Hina Akhtar -Member ‘The objective of management HR committee isto review, monitor and make recommendations to the Board ‘through the Board Human Resource & Remuneration ‘Committee for the following: ‘Committee formed: December 2014. Noof meetings held til Year end: 2 Etfective Employee Development Program; ‘Sound Compensation and benefits plans, policies ‘and practices designed to attract and retain the caliber of personnel required to menage the ‘business effectively. + Review organization structure to evalate and recommend changes in the various functions for effective management of the business operations; ‘* Estabiish plans and procedures that provide an effective basis for management basis over Compary manpower, + Determine appropriate limits of authority and ‘approval procedures for delegating authority to ‘facilitate decision making at various management, levels; SHAREHOLDERS’ INFORMATION and Office trod and Corporate 23,1. Khan Road Karahi-74000, Tet 70217, 34740160 Fax No: i: info@aishasteel.com ‘Website: wwwalshastes.com ‘Share| Central ‘of Pakistan, ‘Share Registrar COC House, 90-8, Block#, SM.CHS, Main Shabrat 7 jne-Faisal, Karach) EOE ELA S00 | Tol Froe060029276 URL wacdepaietan com Stock Exchanges ASMIE equty shores ove loted on the Kerochi Stack Exanange HSE) of Paldten. ‘Stock Code ‘Re tack code. for desing in equity shores of the (Company at the stock exchanges is, ASML shore, depertment is opersted by Centel Sin srore Der ‘Comy of Pakistan (CDC) Sennoes alco functors a an investor Service| Bie ims Door serving esr. 9.000 sharetiotiers: the: Investor Service pera oy a Sereiendeeetaty aed Faallles “and comprehensive ‘sof and ‘earns headed by Mr Abdis Samed at Regairar fice ate Gorpary Soccer et SME Reged Ge, For assistance, shareholders: contact either the Regatere Office or te Share Regatar fee. Contact Persons: (Mr. Mohsin Rajab Ali ‘Tet (021) 111-111-500 Etal:motsin ajabakodapak.com During re, Corner has compliod with al i gem to. Commpany has al applicable ‘sions, ilk all_retums/forms and furnished all the relevant information as required under fhe Companies Orinanca, 4984 and all lave and tules, the Securities and Exchange Commission of Paltstan (ECP) Regulations andthe Listing ‘Regulations, wherever applicable. ‘sharenolders to attend and vote at the meeting, NSeaue hs eet been fled by sharehoiders against he ‘Company for non-receipt of share / dividend. Genoral & Voting Righrte Bateuent te Seclen 196 of se Companies Ocnance, 1984, ASML holds a General Meeting of Shareholders at least once a year Every shareholder has a ight to attend the General ie Notice of guch meeting is sent ‘tp all the shareholders at least 21 days before the ‘meeting and wil iso published inst last one Engich ree re taving eresation Drounoe efter istng of Company scKSE Proxies Pursuant to Seton 464 ofthe Companies Ordnance 41984 and according to the Me smand articles of ‘ofthe Company, rehol ‘Association shareholder of the ny who is eniitied to attend and vote a General ‘of the Company ean appoint another member ‘and vole at the meeting. and vote Is entitled to appoint prowy. The instrument dt ed by the Hagler sto be eapeated atthe Se ‘Share Registrar of the Company not less than 48 hours Boore be mosting ‘he ehreholdg pater ofthe ecuty share capita ot 2 ‘the ‘Gompory "ee ‘on 30th “sn a1 Sher {xtogories of Shareholders are gen on page 78% of ‘this report, ‘Annual Report2022 21 DIRECTORS’ REPORT Dear Fellow Sharehokiers ‘Global Steel Scenario Middle East markets are below 50kes per capita Indleating huge potential The Directors have great pleasure In The global steel Industy has for growth In demand In these presenting the Annual Report of your witnessed a marked shift In regions, Company along with the audited geographical production and. financial statements for the financial consumption pattems duringthe past However, systemic risks remain and, year ended on Jot June 2012 decade. Chinese production of in the short run at least, growth in together with auditors’ report finished steel products, which China and other developing nations thereon, ‘accounted for 20% of world will not be spared from ary negative. production In 2001, now stands at developments emanating from the Global Macroeconomic Scenario 48%, In effect, Aslan nations, led by Euro Zone. hina, have captured significant ‘The global economy remains fragle market share from thelr European, Current demand for finished steel with risks to global economic stabllty Ameran and-=Japanese products remains relatively fit 2s a tited towards the downside, The Euro counterparts, result of the Chinese central bank's Zone Criss remains the biggest efforts to contain property price ‘concer forthe global economy which This shift in production pattems inflation throughout 2011 along with ifescalates wil lead to turmoil in the became more pronounced after the growing fears about the fate of the financial markets and acontractionin financial meftdawn of 2008-09 and Euro Zone.Going forward, the gobal ‘obal economic activity. According to the ensuing economic slump. OECD steel demand is expected to rise on official IMF World Economic Outiook countries and Euro Zone nations in account of increasing population and figures, the workd economy is particular, have been the slowest to industialization. Growth forecast for ‘expected to grow at a reduced rate of recover from the crises 2s.a result of 2014 is estimated at 5.3%; however, 3.5% in Calendar Year (CY) 2012 fiscal austerty measures, baliconing longterm demand growth is expected after regstering.a growth rate of 3.9% public and prhete debt levels due to to revive at higher levels, Hot Rolled in GY 2011. Economia activity is, worsening economia conditions in Steel prices have remained at the however, expected to pick upin 2013 Greece, Spain. lower end of the spectrum after ‘on the back of forecasted GDP growth. peaking at USD730 per ton in July rate of 4.1%, With consumption patiems of | 2011 which have now come down to, finished stee! products following a less than USDE0O per ton It is Economic Indicators suggest that the similar trend, the developing world unlikely that HC prices wil frm up in ‘above trend wil be reflected in the nowacisasakey driverforsustaining near future and shall remain under economies of both developed and growth in the global steel industry. pressure. ‘emerging nations. Stee! consumption in and ‘Share of World Cruce Stoel Production - July 201.2 Global Steel Demand Forecast 24 sta sree. miu.s uMTeD SS 1 (Global Cold Rolled Sheet Industry Cold Rolled Coll (CRC) remains an Important part of the ‘bal steel Industry, accounting for 10% of the world's steel production. ‘Major CRC consumers include Industries such as automobile, construction, home appliances, engineering and pipe manufacturing. Consequenty ‘owth In demand for CRC s drectiy inked to activity In the aforementioned Industres, Domestic Economy The fiscal year under review proved to be a mixed year for Pakistan's economy, On the postive side home remittances and FBR revenue grew at the healthy rate of 17.7% and 17.8% respectively. inflation dropped to single fgures In July 2012 reaching 9.3%allowing the ‘SBP to reduce the discount rate to 10.5% in August ‘20112 from 12% in November 2014. On the negative side, trade dertot increased to USD 21 billon as ‘compared to USD 45 billon in previous year recording a current acoount defictt of USD 4.5 bilfon as ‘compared to surplus of USD 0.2 billon In previous year. Fiscal deficit was substantial owing to higher than budgeted subsidies on power and fertilizers, Foreign investment was dismal with a net inflow of USD742. millon for FDI and portfolio. The country has been plagued by a crippling power crisis and a deteriorating Jaw and order situation that results in lower productive activites. Higher intemational ol prices, lower cotton prices and excessive subsidies incurred by the ‘Government on Power and Fertilizers were other major, factors for negatives in Pakistan economy, Pred Industrial Highlights ‘The demand for steel in Pakistan has constantly been on rise @s the economy exhibits economic south, Domestic Supply however, continues to lag and is evident ty an average shortfall of 33 milion tons per annum, Total steel production in 2044. was estimated at 0.4 milion tons while demand was close to 6 milion tons, This shortfall hes been ‘compensated by Imports that continue to Increase Pakistan's trade defi, Pakistan's per capita steel ‘consumption Is among the lowest globally at ‘27k In comparison toa regjonal average of ‘207.8kgs and a global average of 18:5 kes, However, ven that there is significant growth in the countrys local demand! for stee! n oath the short and long run there ests a huge growth ‘opportunity for your Compary and the Pakistant stool Industry n general. ‘Currently the annual demand for CRC Is between .450,000-500,000 mettle tons per annum. With start of production from your Compary, the local ‘manufacturers of CRC namely, Alsha Stee! Mis Umited, Pakistan Steel Mills and Intemational ‘Stee! Limited can full substantially all ofthis demand, However, there are a number of regulatory and taf related issues which would seriously hamper the abiity of local manufacturers ‘of CRC to operate at optimum capacities. These are: Tne affference between valuation of Prime CRC land Secondary CRC is taken at 25% by Customs Department. This regime supports commercial Importers and is stacked against local ‘manufacturers, Allthe three manufacturers of CRC have quoted various international examples and hhave requested Customs Department t set the discount of Secondary CRC at 4.5% of Prime CRC price. This is inline with what ell the three local and Intemational CRC producers offer on thelr respective Secondary CRC, 2.Uptil recently, Pakistan ld not have the local CCRC capaetty 9 meet demand of CRC users In Paiistan, However, withthe startup of state ofthe ar CRC Complex of Alsha Steel, the three local producers can meet the local GRC demand However, as CRC was not locally avaliable In the past therefore, certain users of CRC were ghven concessionary Import tar under SRO 565. In ‘most ofthe cases, this concession is being abused by the users of CRC who are Importing CRC more than their consumption and seling adtonal CRC Inthe market to enjy this duty benef. As CRCIs. ‘Dow focally made and the three producers of CRC are capable to meet domestic requirements, ‘therefore tat concessions to GAC Importers In Paidstan under SRO 565 should be ellminatod to {ve a level paying eld to CRC manufacturers of Pakistan, CRC Supply In Pakistan - Year 2012-13 ~~ Imemational Stel Ltd 26 asta sree mus unre = Paestan Stoo! ‘Asha Steel Mils Lid Imports ‘3.Pakistan and Cnina signed Free Trade Agreement (FTA) in 2006 to promote goods being manufactured in ‘one country and required in other country to promote ‘trade between our two brotherly countries. When FTA. ‘was signed there wes only one producer of CRC in Pakistan, Presertty there are three CRC manufacturers namely Pakistan Steel, Aisha Steel, and Intemational Steel which can meet all the local CRC ‘demand. However, under FTA Chinese CRC producers are allowed to sell CRC to Pakistan! importers at on'y ‘5% duty as against to paying full 40% dury. Government of Pakistan needs to promote and protect, local Industry and therefore, CRC should be taken out ‘rom FTA with China, otherwise Import from China wl ‘continue to hamper Pakistan! Importers to operate at. ‘thelrfull capacities. 4.Ever since economic and banking sanctions have been Imposed on Iran, there has been a substantial Increase In smuggled CRC from Iran vi Teftan all the ‘way to Multan, Lahore and Gulrarwalla. As CRC ste! coll are heavy {more than 20 metric tons), therefore, ft ‘cannot be hikiden or transported via non-metallic road. ‘Accordingto one estimate between 10-15 trucks ‘carrying smuggled CRC from iran ctoss the border and ply Pakistan's main road allthe way upcountry. “Smuggling ofa bulky product n such a large quartty ‘cannot be possible In a secret manner and therefore, ‘we would Ike to request the relevant law enforcing ‘agencies and Customs to take steps to protect local ‘CRC Industry by enforcing the applicable law of the land and also protect exchequer whicn is losing out on duties and taxes worth billons of rupees, & Your Company will be the largest supplier of CRC In the ‘market and will have competitive advantage over other [producers In Pakistan due to superior Japanese technology machinery. However, other producers co ‘not pose any direct competition risk as domestic demand is more than sufficient 1 absorb 100% domestic supply. In ew ofthe above your Company foresees to be a ‘melor patcpartin the leading manufacturers of CRC Inthe domestic market. n addlion, the management 's confident in the Company's ablity to produce high ‘ually of CRC that can be used in te autornobile sector in Pakistan.This aby wil male further inroads Into the retatvely emergingout to size high end users’ CRO, The Project & Company To meet the rsing demand of steel In the enghneering, automobile, construction, home appliances, ‘engineering and pipe industries the concept of your ‘Company was conoelved In the year: 2005 by one of ts founder sponsor Mr. Hasib Rehman, the President of Universal Metal Group Japan, and for this purpase he established and got incorporated ASMLon May 30, +2005 as a pubilc immed compar. parr eoup 1 Meta One Cameron Uren Meta oup 1 PrePo Invests FS rear Pubbe 1 Pret. Specie Dion Feldes Annual Report 2012 27 rR ES tees +f” a ‘After incorporation of ASMIL, Mr. Hasib Fee toa Pee a et et ‘Metal Group inthis project as Joint Venture Partners. The col ring project has name plate capecty of 220,000 tons per annum located at plot of 50 acres in Downstream Pe ede (Qasim, Karachi. The project includes Pickling Line, 4High Cold Roling & Skir-pass Mil, Batch Annealing Fumaces, and Recoling Line. Adionally 0 be the foremost value dae ekheiheleiokld ae custorners, ASML has installed Electroytic Cote ea eee a Retour te Deane ee a is financial mettdown in the Country and, Eee ne EL the Project faced huge cost overruns and Cea challenge, one of the aforesaid Joint Venture eee aetna nid Cet eae) ‘and took the management of the Project Megs ea) rae nd ‘capital of Rs. 759 milion and arranged cost Cen a ee Pea ed Coe ak ad the Project wes completed by June 30, 2012 Cee rE a Even though there have been ups and downs In our Project, the steadfastness of Ait Habib Se eed ete tne Ce es) us to come this far. Coe da ara) Ca Dt leans ad Dee eee Ls) cree Listing of Company ‘During the year under review, the Board approved the listing of Company at the Karachi Stock Exchange by Offer for Sale of 10 milion shares at par value of PKR10/share by existing sharehokiers (three JV Partners) alongwith a Pre1PO. by way of new 23.4 million shares issuance at par. ‘After obtaining all regulatory approvals the PrePO Portion was successfully ‘completed in April 2012 end listing of ‘Company at the KSE was completed in the manner that subscrietion of ordinary shares was held on 3rd and 4th July 2012, balloting was held on 27th July 2012 and ASML shares commenced trading on August 6, 2042. ‘The public subscription has been oversubscribed by 2.7 times making it the mast successful public offering of the past three financial years. The PrePO portion ofthis transaction ‘amounting to Rs.234 milion achieved a successful financial close in April 2012 following an overwhelming response from the financial sector in the country. ASML's OFS also has the privilege of being the frst public offering using ‘e-subscriation, as well as subscription using mobile phones. One of the major shareholder and IV Partners of the Company M/s. Arif Habib Corporation Limited have also dlstributed 41.25 milion convertible preference sheres of ASML having a face value of Rs. 412.5 milion as Interim specie dividend tots shareholders for the nine months period ‘ended 31st March 2012. Consequently, your Company also listed its Convertible Preference Shares at-the Karachi Stock Exahange. ‘Company's Operations. ‘The year under review was landmark for Aisha Steel Mills Ltd as the Company thas successfully completed the ‘construction phase of the Project and started is hot run in May 2012 after being energized a few weeks earrier. The ‘Company commenced technical ‘commercial operations in June 2012 by initiating trial production in line with Japanese standards, to ensure prime ‘quality CRC supply to the commercial ‘market. ASML commenced sale of CRC in August 2012. We are pleased to share that the response received from the market for ‘our product has been overwhelming, We are grateful to our 18 excusive ealerpartners for this success. Confienoe of our Dealer Partners can bbe further gauged from the fact that cur dealers have placed securty deposit ‘with ASML to become part ofthis ‘ecclusive ASML Deelers’ Cub. Uptill September 15, 2012 our sales figure has croseed c. PAR 220 MI (3,000 MD). Aswe are ina step up phase therefore our monthly sales will increase ‘accordingly for us to achieve our yearly target. Besides sales through our exclusive dealer partners, we have also initiated direct sale to end customers, which will build on as we progress forward. ‘Your Company is fortunate to be part of Mitsubishi Group, Metal One Corporation (majority ewned by Mitsubishi Corporation) one ofthe largest sige! trading Corporation in-the ‘world, provide ASML an edge in procurement of our raw material Hot Rolled Coils (HRC), Thanks to Metal One Corporation, ASML has been able to develop a strong relationship with Nippon Steel Corporation, a premier ‘supplier of HRC. In addition to this, your Company has also developed direct relationship with another renowned HRC ‘supplier, POSCO, South Korea. ‘As of September 2012 ASML has [procured 38,600 MT HRC (c.47,000 MT HRC has reached ASML) ensuring. ‘sufficient raw material supply for smooth. ‘operations for the next couple of months, ASML is ourrently operating in two shifts ‘with its third shift Is expected to start in November 2012. ‘The Company isin the process of building's technical base further, Besides Japanese and Austrian ‘Supervisor (6) are constantly training the ‘existing work force and ensuring prime quality CRO, ASML has also inducted 9 Bangladeshi experienced engineers and ‘technicians to supplement lack of experience professionals in CRC sector. ‘Annual Report 2012 29 ‘The Company's Results ‘The summary ofinancial resus is 2s follows: During the year under review, your Company incurred ‘anet loss before tax of Rs. 432.44 milion and loss, ‘after tax of Rs. 86.08 milion as compared to loss before tax of Rs. 51.60 milion and a profit after tax of Rs.139.34 milion in the comesponding year enced ‘on 30 June 2011 There are certain factors which resulted in such a large positive variance between the loss before tax for the current and last year. The. ‘administrative expenses have increased as. ‘compared to coresponding year on account of substantial increase in the human resource, ‘extensive local and intemetional treveling 8 training, for the purposes of project completion, end listing ‘expenses which was initated during the year. ‘Also, during the current year the Company also recorded deferred tax asvet according to the requirements of Intemational Accounting Standard -12.“Income Taxes” to the extent of future probable profits which resutted in recording of corresponding, Income of RS4635 milion es compered to s.190.29 milion in the corresponding year. Future Outlook Going forward, ASMIL intends to become not onty the. largest seller of CRC in Pakistan but also the best, ‘quality producer by offering all grades of CRC. ASML plans to achieve this objective by increasing its ‘capacity utilization, leveraging the extensive dealers network while simultaneously initiating direct sale to ‘customers, improving operational safety and ‘continuously improving our human capital. All through these thrusts, the Compeny will im to uphoid the highest standards of corporate goveriance, clean environment and create a reputation ofintegtty. The Company hes prepared an ‘achievable budget for 2012-13, backed by robust business planning and is confident of delivering on these goals. As is the case with most company’s in ‘startup phase, due to high fhe costs and ramping up affect of capacity utilization, first year of production always remains the mast challenging, however, we are confident to face these chanllenges. Moreover, we ere expecting that the Govemment will provide a level playing field to local manufacturers of ‘CRC by removing anomalies in regulatory and tariff regimes and meke CRC sector inline with other sectors. ‘Toachieve the above stated future outlook the Board, of Directors of your Compeny has resoived in its today’s mesting to declare October 1, 2012 as the ‘Commercial Operation Date of ASML. Risk Management The risk management system of the Company established by the Board comprises of a wide range of finely tuned ‘organizational and procedural components and is capable of identifying events and developments impairing the ‘going-concem status of the Company. The risk management system is designed to promote a balanced approach to risks at all organizational levels identify and analyze the opportunities and risks at an early stage, thelr measurement and the use of suitable instruments to manage and monitor risks. ‘With the Company's key business being that of a manufacturing concem, it has evolved its risk management system as its production & sales strategy has evolved. Starting with raw material procurement, the Company has always followed 2 policy of diversification between sources and quality and atthe same time basing decisions regarding product mix requirements of the market on fundamental customers demand and market analysis and following the goklen rule of value investing. ‘The Company manages its risk by applying caution with respect to the stock selection and inventory levels; avoiding ‘concentration risk, ensuring credit/recelpt of clean funds from the buyer dealers and continuously assessing the ‘capacity of the courterperty. In adcition, the Compary has played a continuing tole through its representatives inthe Lahore: 23-C, Aziz Avenue, Canal Bank, Gulberg V, P:O.Bax 39, Shahrah-e-Quaid-e-Azam, Lahore-54660; Tel: +92 (42) 35715864-71; Fax: +92 (42) 35715872 Islamabad: PLA Building, 5rd Flor, 49 Bh Area, Fal Hog Rond, PO Rox 300, Ienburt$4000: Tel. 292 (51) 22734570; Fx: 92 (1) 2277924 ‘Kabul: House No. 196, Street No. Behind Cinema Baril, Nahar-e-Darsan. Karte-, Kabul, Afghansta: Tel: +99 (79) 315820, +9 (99) 315320 POWERING THE COUNTRY — 50 etereerece tae / og _ pwe A. F, FERGUSON & CO. AUDITORS’ REPORT TO THE MEMBERS ‘We have audited the annexed balance sheet of Aisha Sigel Mils Limited as at June 30, 2012 and the related profit and loss. ‘account, cash flow statement and statement of changes in equity tagether with the notes forming part thereof, forthe year then ‘ended and we state that we heve obtained all the information and explanations which, to the best of our knowledge and belief, ‘were necessary for the purposes of our audit. Its the responsibilty of the Companys management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the (Companies Ordinance, 1984, Our responeibilly is to express an opinion on these statements based on our audit. |We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whelher the above sald statements are free of any material ‘misstatements, An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said ‘statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well ‘28, evaluating the overall presentation of the above sald staternents, We believe that our audit provides a reasonable basis for ‘our opinion and, after due verification, we report that: 2) _ In our opinion, proper books of account have been kept by the Company as requited by the Companies Ordinance, 1984; b) _Inouropinion: |) the balance sheet and prof and loss account together with the notes thereon have been drawn up in conformity with ‘the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with ‘scvounting pollles consistently applied; {the expenditure incurred during the year was for the purpose of the Company’s business; and Ii)_the business conducted, investments made and the expenditure Ineurred during the year wore in accordance with the ‘objects ofthe Company, 6) Inouropinion and to the best of our information and according to the explanations given tous, the balance sheet, profit and Joss account, cash flow statement end statement of changes in equity together with the notes forming part thereof, ‘conform with approved accounting standards 8s applicable in Pakistan, and, give the information required by the ‘Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Companys affairs as at June 30, 2012 and ofthe loss, its cash flows and changes in equity forthe year then ended; and ©) _inuropinion, no Zakat was deductable at source under the Zakat and Ushr Ordinance, 19B0(%Vill of 1980). A. F. FERGUSON & CO.,Chartered Accountants, a member firm of the PwC network State Life Building No. 1-C, LI. Chundrigar Road, P.Q. Box 4716, Karachi-74000, Pakistan Tel: +92 (21) 32426682-6/szqn6711-5; Fax: +92 (21) 32415007/32427938; Lahore: 9-6, Aix Avenue, Canal Bonk, Gulley V; PORax 30, ‘slamabad: PLA Building, sre Floor, 9 Boe Area, Fat ‘Kabul: House No 196, Street No. Behind Cinema Baril, Naha-e-Darsan. Karte-, Kabul, Afghansta; Tel: +99 (79) 315820, +99 (99) 315320 BALANCE SHEET ‘Ag at 90 June 2012 Note 2012 2011 Rupees ‘000 ASSETS ‘Nomcurant aasota ‘Property pantand equpment 3 aasyess 0.927051 intgoles ‘ 1138 “9 Lengo ans 5 ps2 2300 Lang arm dapat and prepayments 6 47504 aziz Defer tox 7 aug __ 190929. Grate 7,190,860 (Curent aasete ‘Sores and pares ‘Socctroaso aw matoal ‘arcen, Sepsis and prepayments s “Tact: dun rom Govermort - Sales tx pecriedrrareep “Taton- payer es provision ‘Cas ers bank belanose 0 Tonal aascte EQUITY AND LIABILTIES Equty ‘Share captal " Ondnary shares peop = 245,700 imate preoronca saree a1 Te ‘Shae dpost money - 3571 ‘Aecumultos ees ars, peice 20757 2805 abiien Noneurant aston rm aca 2 Baa) [aaa gaia asses subject slrorema borat “ a om suse ames Curent ation “Tae end oer 5 sat 206s Boones rankep 6 sotpos| | aioe ‘Surttnn boremings 7 Cn) Grretmasury of eng franco 2 ‘9000 4 Curent atury of aes aga asset, ‘bec oranoe bases 8 367 1907 Zpe0o0s 6,196 (Contingencies and commiunents 2 ‘Total equity and lisbon ‘The annasnd notes {1083 form an Integral pat ofthaso fhancial etre, Chairman Chit Executive Officer (Chie! Financial Oficor 52 asia stes. wis unareD For the year ended 30 June 2012 Note 2012 2011 Rupees ‘000 Administrative expenses: 2 (107,108) (Other operating income a sone Finance cost 2 (4313) ‘Loss before taxation ~~ 61,580) “Twxation - deferred 190.928 (Loss) / Profit forthe year ator tx (Other comprehensive income - ‘Total comprehensive (loss) /Income (Loss) /eaming per share Es 028 ‘The ennered notes 1 to 33 form an integral part of these financial statements, CASH FLOW STATEMENT For the year ended 30 June 2012 Note 2012 2011 Rupees 000 ‘CASH USED IN OPERATING ACTIVITIES (Cash used in operations 5 (era7at) (108,783) Income tax paid 23315) @.145) Maricup on loans paid (49598) (602,969) FReum on bank deposits received 3874 58,148 Staff retrement beni paid ean) (ez7) Increase in long-term employee loans 133) 508) DDeorassa /(iarease) in long-irm dopoaits and prepayrants ora 18) Net cash used in operating activities (77Tp86) (656.803) ‘CASH USED IN INVESTING ACTIVITIES Purchase of property plant and equipment 41,708,476) (041,773) ‘Acquistion of inangiie assets (111135) @72) ‘Sale proceeds on disposal of propery, pant and equipment 287 - Net cash used n Investing actos Garza) (642,045) ‘CASH FLOWS FROM FINANCING ACTIVITIES ‘Share captal issued 2eazea | [1211306 ‘Share deposit money recehved - art Long-term fnanes obtaned ezziza || 1,205,780 ‘Soilement of shor “orm finance (100,000) | | (10.000) Increase / (decrease) in Fables agelnst assets subject to finance leases 6.183 (2746) NNeteash inflow tram fhancing actvtios 087507 2,427,961 Net (decrease) /Increase In cash and cash equivalents (143066) A803 ‘Cash and cash equivalents at beginning o the year 938540 109817 ‘Cash and cash equivalents at end ofthe yaar 28 (ae2A0s)_ 838.540 ‘Cashriow statement based on dlrect msthod has also bean Included n the financial statements in note 27. “The annexed notes 1 1033 form an integral part of these financial statements, Ci ahd 2 Gaus Chiot Executive Officer Chiet Financial Officer 54 asasten. wis unre For the year ended 30 June 2012 ‘Share Share Accumulated =Total Capital ——_dapoatt tooee money ———— Fupeee 00 Balance as at July 1, 2010 1,989,000 (483.920) 1,495,080 ‘Share deposit money received - 1214907 - 1214907 ‘Share issued 1211336 (1,211,396) ‘Total comprehensive income forthe year ended June 30, 2011 - - 139889199889 Balance as at July 1, 2011 32005898 as7i Geen) (240828 ‘Shares lssuod 237865 (3571) 234294 Total comprehensive loss forthe ‘ended June 30, 2012 = - . (08,088) (88,089) Balance as et June 30,2012 3,438,201 = _ (Honey 2,007,557 ‘The annexed notes 1 fo 33 form an integral part of these financial statements, Noies to the Financial Statements For the year ended 30 June 2012 1, THE COMPANY AND ITS OPERATIONS: ‘The Compary was incorporated in Pakistan on May 30, 2005 as a publ limited company under the Com- pparies Ordinance, 1984. The registered office of the Company is situated at Arf Habib Centre, 23 MT. Khan oad, Karachi “The Company Is setting up a cold rong mil complex in the Downstream Industrial Estate, Paldstan Steel, Bin (Qasim, Karachi. The production capacity of tha plant is 220,000 metric tons. The Plant s near complation and ‘tla production commenced fram the manih of Api 2012. Commercial production date is expected in frst ‘quarter of the financial year ending June 30, 2013. In June 2012 an offer for sale of shares was made by Motal One Corporation, Japan, Arf Habib Equlty (Private) Limited and Mr. Hasib Rehman, the exeting sponcore of Alsha Steel Mis LIrted. The prinalpal purpose ot ‘the offer for sale of chares was to let tha Compary on the Karachi Stock Exchange (KSE). The subscription cf these shares was made on Srd end 4th July 2012. After the fulfilment of other formalities to ‘trading of Company's shares in KSE staried on 6th August 2012. Therefore, as at June 30, 2012 the legal staius was that of an unquoted company. However, for the purpose of betior disclosures the Company have voluniaiy folow Forth Scheduie of Companies Ordinance, 1864 in the preparation of these financial ‘statements. 2 SUNIMARY OF SIGNIFICANT ACCOUNTING POLICIES 21 Basie of preparation “These financial statamants have been prapared In accordance wth approved acnountng standards 38 ap- DBicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Stan- dards ((FRSs) issued by the International Accounting Standards Board as are notified under the Companies ‘Ontinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984, In case require- ‘ments dif, the provisione or dectives of the Companies Ordinance, 1984 shall prov, The preparation of financial statements In conformity with approved accounting standards requires the use of ceria eral accouring estimates. algo requres management io exercise ts judgment te process of ‘applying te Compary/s acouning policies. The metarinivng higher degree of judgment or complex, ‘or area where aseumptions and estimates are significant lo the financial staterrents is deferred taxation which ie dependent on ure proftabily of tie Company, 21.4 Cattcal accounting extimetee andi judgements “There have bean no erica! judgments made by the Company's management in applying the accounting pol- es that would have significant effect onthe amounts recognised inthe financial statements. 22 Newand amended standants adopted by the Company ‘Ther IFRSs or Intemational Financial Raporting Interpretation Corrmnitise Interpretatiors arootocho rte ‘rtm bre tancal yur bogting oh orale ay 1-201 fut wo Po puted © have a material impact on the Company. 23 New standards, Interpretations and amendments to published approved accounting standards that ‘are considered relevant, but not yet affective Following amendments io existing standards and interpretations have been published that are mandatory for accounting periods beginning on the dates mentioned below: 56 asia stes. nis ummep For the year ended 90 June 2012 24 25 26 ar 20 |AS 18 (Amendment) -‘Employee benefits is applicable forthe periods begining on or iter January 1,2013.ft

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